Why Are Consumers Opposing TPP?

The Problems of the Trans-Pacific Partnership (TPP) Agreement

Yamaura Yasuaki
Secretary General of Consumers Union of Japan
November 3, 2010

(1) The Problems of FTA/EPA

Currently, the participation in TPP is a very large political issue for Japan. We regard TPP as simply a part of the Free Trade Agreements (FTA) that have come into effect since May, 2006. The ideal way forward for FTAs is what must be discussed prior to any decision about whether joining TPP is the right path for Japan or not.

Though the government notes that they regard the WTO rules as the basis of Japan’s trading policies, in fact, they negotiated Free Trade Agreements and Economic Partnership Agreements (EPA) with 12 nations since the first agreement with Singapore in 2002. Moreover, they consider FTA/EPA to be important in the new growth strategy, which attempts structural reform, as well as economic restoration nationwide.

The problem of FTA/EPA is that it provides discriminative trading rules. This is fundamentally based on economism (the reduction of all social facts to economical dimensions) carried out by the powerful nations, reflecting the gaps of power of the countries concerned. We think this will create a world where the law of the jungle prevails. It is quite different from what WTO is promising in terms of rule-based trade, a multilateral trading system such as the most-favoured-nation (MFN) status and national treatment, with considerations for diversified global trade.

(2) Direction of the New-growth Strategy

The current partner countries of FTA/EPA with Japan are as follows: Singapore, Vietnam, Thailand, the entire ASEAN block, Malaysia, Brunei, the Philippines, Indonesia, Switzerland, Mexico, and Chile. India was included in this queue as of October 25, 2010. So far, Japan has been avoiding deals with farm exporting nations. However, Japan is still negotiating with the GCC (Gulf Cooperation Council), South Korea, Peru and Australia. Australia is another huge farm exporting nation, and being partnered with Australia would mean having to deal with its TPP companion, especially the US, bringing hitherto unequaled effects upon Japanese agriculture.

Also, relying on the logics of export competition as a diplomatic policy means turning a blind eye to future troubles. The current FTA/EPA occurred so far in Japan only helped the strong, exporting-centered industries to survive, neglecting the small-medium sized enterprises. We are particularly concerned about the bad effect on Japan’s agricultural sector.

The Japanese government tells the farm lobby that it is considering some policies concerning agricultural matters, such as structural reform of the agricultural system, and drawing up policies to protect domestic agriculture. But it is quite impossible for any Japanese system to compete with the mega-sized farming systems in America and Australia.

(3) The problems of TPP

TPP is a regional FTA started by Singapore, New Zealand, Chile, and Brunei, the countries that signed the original FTA partnership. Its unique feature is the abolition of all tariffs without any exceptions. The aim is zero tariffs and deregulation not only for manufacturing industries or agriculture, forestry and fisheries, but also for postal insurance and the public service sectors.

After the November, 2009 APEC meeting in Singapore, it was declared that the US, Australia, Peru, Vietnam and Malaysia would start accession negotiations with the others and form the TPP. Clearly, the farm product exporting giants, the US and Australia, will have a large influence on the nine countries in the TPP block. Furthermore, Canada has also expressed interest in joining in the future. For Japan, this could result in a huge drop in the rate of food self-sufficiency from the current 40% to around 14%, according to government estimates, and an economic loss of 4.1 trillion yen for the entire country; specifically, estimates for Hokkaido indicates that the influence on local farm products could be losses up to 556.3 billion yen, which can be compared to the entire economy of Hokkaido, which is 2 trillion yen, if it has to compete with Australia and the US (Source: MAFF 2010).

(4) Why are consumers opposing TPP?

Consumers Union of Japan is opposed to deregulation of trade, and we have persistently protested against the WTO negotiations, FTA-AP, the FTA between Japan and Australia, Japan and South Korea, as well as Japan and the United States. We also oppose the TPP for the following reasons:

First of all, we note the negative results that FTA has brought. Examples include environmental destruction and the effect on wildlife as tropical forests have been cut down for palm oil production, and the worsening conditions for factory workers as developing countries race to increase exports at the lowest possible price. From many regions, there are also worrying reports of how people’s staple food production has been sacrificed as a result of export-oriented food production. Moreover, large investments and the expansion of financing has led to deprivation and increased debt problems in developing countries. Deregulation and free trade is also the main factor behind the collapse of the industrial order here in Japan, and we consider it directly responsible for deteriorating labour conditions.

In addition, we regard FTA as a cause of the further decrease in Japan’s food security and already low rate of food self-sufficiency and the impetus to the decline of our country’s agriculture. We also fear that food safety standards will be lowered as part of the mutual recognition system that will be put in place on the pretext of removing trade barriers as part of FTA/EPA.

Now, TPP has become a problem as well in the hegemony duel regarding the establishment of economic blocks in the Asia-Pacific region. Japan has had a focus on promoting good relations with APEC and the FTA-AP, while China has taken the initiative to a FTA with ASEAN+3. It seems obvious that the proposed TPP is an attempt by the US to counter the economic growth of China and gain influence in the region.

For consumers, it is crucial to strongly request an ideal way forward for fair trade between people around the world, rather than the narrow, hegemonistic free trade interests of large exporting countries.